The cone of silence prevails on a possible restart date of the Sugar Zone mine, north of White River.
Vault Minerals, however, is shedding some light on how things will come together to resume production at the mothballed underground operation based on some details in a February news release and an investor presentation this month.
Vault is a merged entity of two Australian mining companies, consisting of Silver Lake Resources, which originally acquired Sugar Zone in 2022, and Red 5. The companies rebranded to its current name last June.
Mining at Sugar Zone ground to a halt in the summer of 2023 when Silver Lake decided to re-evaluate the whole operation and come up with a new mine plan. That began with a 93,000-metre drill program, intended to get a better understanding of the ore body in and around the mine.
Sugar Zone first went into production under the Harte Gold banner in 2019 before entering creditor protection two years later. That’s when Silver Lake entered the picture. Sugar Zone is its first gold mine outside of Australia.
Based on a year’s worth of drilling in 2024, Sugar Zone currently contains gold reserves of 1.9 million tonnes at 5.2 grams per tonne for 325,000 ounces. The measured and indicated resources come in at 4.8 million tonnes at 8.2 grams per tonne for 1,278,000 ounces.
That’s enough to support a 6.5-year mine life.
Estimated gold production will be 50,000 ounces a year. The all-in-sustaining cost is pegged at $2,000 an ounce. The planned mining rate is around 900 tonnes per day or 310,000 tonnes a year.
The cost to put Sugar Zone back into mining mode amounts to $18 million. Most of that is earmarked toward the construction of a new tailings storage facility that should last the life of the mine.
A further $55 million will be needed to carry out a nine- to 12-month period of pre-production mining, generating approximately 7,000 ounces.
Looking ahead, Vault sees considerable gold upside at Sugar Zone with untapped potential around the deposit in the Sugar Main and Middle Zones.
Drilling in 2024 confirmed that the gold resource at its Sugar Main and Middle Zone is “open in multiple directions” including some high-grade hits.
A few hundred metres away, there is an opportunity to create a new mining front with the Sugar South Zone where exploration drilling kicked off in February.
Since acquisition, the company has made substantial investments in an effort to mine more efficiently and effectively, such as purchasing a new underground fleet in 2023.
Other improvements include cutting down on the commute time to work by relocating the worker accommodation camp from the town of White River to the mine site, 30 kilometres to the north.
On the government regulatory side, Vault said the provincial mines ministry has sent word that it’s satisfied with the consultation that’s been done with area First Nations. That’ll be favourably factored into the company’s amendment to its mine closure plan.
With gold prices hitting the US$3,000-an-ounce mark this week, Vault said should the gold climate stay high, it won’t hesitate to deploy capital at assets, like Sugar Zone, that show growth opportunities.
